Gardiner Expressway repairs 'months ahead of schedule' as crews begin next stage of project Apr 26th
Renting vs. buying: Which is the better option? Aug 20th
The best high-interest savings accounts in Canada for 2025 + MORE Oct 14th
Nvidia beats revenue expectations in Q2, but fears of a tech bubble persist + MORE Aug 29th
Stock market news for Canadian investors: Cineplex, Sun Life Financial and more Feb 13th
TFSA vs RRSP: How to decide between the two
– moneysense.ca
One of the most common questions out there is whether to invest in a registered retirement savings plan (RRSP) or a tax-free savings account (TFSA). Both will help you save, and save on taxes, but each works in a different way. Understanding how these accounts work will help you decide which is best for your current needs—and even when to use them in tandem.
What is a TFSA?
A TFSA (or tax-free savings account) is a registered investment savings account that any Canadian resident, aged 18 or older, can use for straightforward savings or to hold investments. It can store things like exchange-traded funds (ETFs), guaranteed investment certificates (GICs), bonds, stocks and cash.
Any income earned in the account—even when it is withdrawn—is tax-free. This means any interest, stock dividends and capital gains earned in your TFSA aren’t subject to income tax. However, your TFSA contributions won’t reduce your taxable income like RRSP contributions will.
There’s an annual limit to the amount of money you can contribute to your TFSA…
What’s my RRSP contribution limit?
– moneysense.ca
RRSP contribution rules highlights
Your RRSP contribution limit is based on the maximum annual RRSP contribution room set by the Canadian government, the earned income you had during the previous tax year, and any unused contribution room from previous years. Overcontributing to your RRSP by more than $2,000 can result in a penalty of 1% per month on excess funds left in the account.
Putting money into a registered retirement savings plan (RRSP) is one of the best ways to save for retirement. Some people choose to contribute a lump sum to their RRSP, just before the annual deadline, while others prefer to contribute regularly through automatic deposits. Whichever option you choose, be aware that there’s a limit to how much you can contribute to your RRSP in any given year. The RRSP contribution room calculator above will get you the numbers you need, but keep reading for more information on RRSP contribution limits…
